Macro Man on Fed-Speak

Two funny posts:

Macro Man translates Yanet Yellen’s recent congressional testimony for us.

Bill Bonner’s review of Hillary Clinton’s autobiography – entertaining!

Reading these two articles one invariably gets the impression that world “leaders” either do not get it, or that they try to deceive us intentionally. While most people fall into the latter camp (think conspiracy theorists), I really believe that they have no clue what’s going on – at least, this is my experience working with government at different levels. People usually find that hard to believe: they observe that in sports or at work, generally speaking, the best get promoted and assume that is true for government as well. Yes, there is also a lot of politics at, say, Microsoft and at Harvard (“peer review”) but it is usually within acceptable bounds. Those companies that adapt unsound management practices and that are not protected by a state monopoly usually fail. Not immediately of course, but they do fail in the end.

This is different in bureaucracies which live in an artificial environment: there are no profitability targets and no angry costumers. It is also difficult to assign responsibility to someone specifically. It it Obama’s bad leadership, or those stubborn republicans that prevent the implementation of sensible measures? In a democracy, we are told, “we govern ourselves” and as a consequences it is not so easy to point to those responsible. People influencing the decisions, i.e. bureaucrats behind the curtain, usually are not known to the public. In short: the ideal breeding ground for demagogues who profit from disorder and who have no hesitation in pointing the finger at suspects without real evidence: “When it becomes serious, you have to lie“.

Competence in problem solving, in other words, is the least required character trait – therefore we should not expect to see it. Instead, we get empty suits whose only goal (and skill) is to conceal their real intentions as much as possible.


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